Anil Ambani-promoted Reliance Infrastructure (RInfra) has said it is expecting almost three-fold rise in revenue from the infra vertical to Rs 1,000 crore this fiscal.
"We are looking at a revenue of Rs 1,000 crore from the infrastructure vertical this fiscal, to double the same to Rs 2,000 crore by FY14 as by then we expect to complete most of the road projects apart from the metro projects," RInfra Chief Executive Lalit Jalan has said.
This vertical had contributed only 1.5% to its topline last fiscal. Notably, the infra vertical was the biggest drag on the company's net income as well as topline last fiscal, with a revenue of just Rs 366 crore out of its turnover of Rs 24,272 crore.
Driven down by a dismal show by the infrastructure vertical, RInfra had reported a flat net profit at Rs 411.46 crore for the March quarter, despite a whopping 90% jump in operating income.
For the full fiscal of FY12, its net profit rose just 2.27% to Rs 1,586.81 crore, while operating income grew 59.47% to Rs 24,271.80 crore.
Profitability was also blunted by the rise in expenditure and finance costs. While total expenditure rose over 84% to Rs 6,740 crore, its financing costs were up over two times to Rs 419.30 crore during the quarter.
"Standalone profit has almost doubled, but on a consolidated basis net income was flat because of the infra projects which are in early stages. That is the reason we are being weighed down by our infra portfolio," Jalan had said while announcing the results.
RInfra, which has 11 road projects in its order book, expects 10 projects to be operational by this year.
Out of the current project portfolio, five have already been completed and an additional three will start generating revenues within the next three months, he said.
Meanwhile, RInfra is also scouting for stressed assets to enhance its road portfolio, Jalan said.
"Given the aggressive competitive scenario, we have not been able to bag new contracts for the last two years. But now we are looking at 20 such secondary assets predominantly in the road sector," Jalan said.
The firm expects to commission the Mumbai Metro during the current fiscal, he said, adding, "nearly 92% of civil work have been completed. We expect revenue from the Mumbai Metro from FY14. That will become a substantial revenue earner."
The Delhi Airport Metro, which sees over 20,000 commuters daily, still has a couple of years to become profitable, he added.
The company is also planning to bid for other metro projects to expand its infrastructure kitty.
"Lot of bids are at various levels of discussion for metros like Jaipur, Pune, Nashik, Chandigarh and Gorakhpur. There is also an extension line in Delhi itself from Dwarka to Gurgaon, which the Delhi Metro wants us to take up.
"We are qualified for Jaipur, Mumbai and Delhi now. Hyderabad was the last one we bid for, which was lost," Jalan said.
The company is also planning to commission its 5-mtpa cement unit at Butibori in Maharashtra in the next quarter, Jalan said.
He added that construction of a cement plant at Maihar, Madhya Pradesh is also on, which will be commissioned in the third quarter of FY14.